Golden Lions are bankrupt : Guma report

The Golden Lions Rugby Union are totally bankrupt according to a document sent to GLRU president Kevin de Klerk by the GumaTAC Group.

The Lions debts amounting tens of millions including a R30-million with ABSA which they have to pay back by Sunday and a claim of having to pay back around R14-million and the inability to pay salaries are all topics covered in a document from the Lions BEE partners.

The document has been released after BEE partners the Guma Group (Robert Gumede and Ivor Ichikowitz) pulled out of the partnership and is an explanation about why they have ended their partnership.

The document was submitted to the GLRU president on 27 June and signed by Gumede and Ichikowitz but has been leaked to Sport 24.

However Lions president De Klerk says that he already has an offer for a new equity partner and that he disputes several items.

“Every item in that document could be disputed. It is them (Guma) who walked away,” he told Sport 24.

“Some of the clauses still needed clarification. All I want to say is that the GLRU will survive. “

“The union has survived for 120 years and will continue to do so,” he said.

De Klerk is unconcerned about the R30-million loan and also guarantees that employees and players at the GLRU will be paid.

According to Sport24 the following allegations are included in the Guma correspondence:

1. The Guma Group on its own accord managed to get sponsorships of about R100-million for the Lions. The sponsorships, which were negotiated based on the Lions’ vision to transform, may now be in jeopardy.

2. The Lions considered an offer of R220-million for the sale of Ellis Park by the Marc Group while the government spent R540-million on improvements to the stadium ahead of the FIFA World Cup.

3. The GLRU were unable to pay salaries in October and December last year, as well as in January this year. The Guma Group had to provide a guarantee to ABSAto ensure that salaries could be paid.

4. The Guma Group had to step in to ensure that the repayment of a loan of R30-million to ABSA in May was postponed and recently also had to negotiate the extension of payment of the loan until 3 July.

5. The GLRU has up to 90 players under contract and some of the players are receiving big salaries in spite of not being at training.

6. Dick Muir (former Lions coach) received a salary of about R2,2-million per year, even though he has not been actively involved at the Lions since May last year.

7. Certain members of the Golden Lions executive have pursued their own agendas and undermined the partnership.

GumaTAC argue that they have invested R14-million in Lions rugby to date and the businessmen’s legal representatives will enter into talks with the GLRU to negotiate about how the money is going to be repaid.

The Lions hit back with a statement in which De Klerk dismissed the allegations
that the Union was unable to meet its current financial commitments.

“The document is a letter from Robert Gumede to me which reflects the opinions
of one party,” said Mr De Klerk.

“We obviously do not share the views of the author. It was a confidential
letter to me that was leaked to the media and I am of the firm opinion that
the correct forum for these matters to be addressed is not in public.

“The letter contains untested claims and I can assure our supporters
that the Golden Lions Rugby Union does not face bankruptcy – the very
idea is news to us.

“Our intentions have always been honourable in engaging with an equity partner
and my objectives and views around identifying a BEE partner are well documented.
“

“We accepted an approach by Guma as a result of this. We will continue
to act in an honourable way by not discussing commercially confidential matters
in public.”

“Suffic